Key Points

  • Reaffirms the importance of considering whether an applicant’s position would be improved by the making a vesting order
  • Useful guidance on the extent of the court’s powers when granting a vesting order.

The Facts

The application, brought by the sub-lease holders, concerned the vesting of a 999 year head lease recently disclaimed by the Crown following dissolution of the lessee in 2000. The term on each of the applicants’ sub-leases was 125 years. The Crown also had the benefit of a 999 year sub-lease which it potentially sought to disclaim.

The applicants sought the vesting order as a solution to the (purported) range of legal and practical problems that the dissolution of the lessee had caused them. They further argued that the question of whether the consequence of vesting the lease in them would be to improve their position was irrelevant. They maintained that in any event the position of the freeholder would be unaffected if the court made the order they sought.

The key issue before the judge was to what extent the decision on whether to vest the head lease in the applicants was determined by any resulting improvement to their position.

Decision

Mr Registrar Jones did not vest the head lease in the applicants (or in a trustee for their benefit) but instead, acknowledging that the current situation was unsatisfactory to all parties (the freeholder included) proposed the solution that the lease be vested in a trustee management company governed by terms to be agreed by all parties that preserved the status quo of their current proprietary interests.

The application was adjourned to allow for the presentation of a revised proposal.

Hanbury & others v Hogan [2016] EWHC 3330 (CH)